The U.S. Chamber of Commerce, a member association representing over 3 million businesses in the United States, both big and small, says the uncertainty in the tax code is killing business in the U.S.
Its chief economist, Martin Regalia, was quoted this week as saying that the economy needs to grow at least 3 percent or We will not re-employ the people who have been displaced. They will die in their current status.
Wow, Mr. Regalia makes a pretty strong statement. He also went on to say that this uncertainty was caused by Congress passing the health-care bill, the new financial services regulations included in the Financial Reform bill, and the indecision Congress is displaying when it comes to extending the 2001 and 2003 Bush tax cuts.
One of the regulations tucked away in the health-care bill that has turned the business community on its ear is the so-called "1099 provision.'' This little health care gem requires all businesses to issue a 1099 form to any company which provides more than $600 of business or services to any small business.
So if you are a small brick-and-mortar business, and you use a lawn service or a coffee service totaling more than $600, you will need to send them a 1099. If you purchased more than $600 in office supplies from your local paper supply business, you will 1099 them, too. I trust you get the picture.
Senators will be given the opportunity to repeal or replace this health-care gem when they return to D.C. on Sept. 14. They will be asked to vote on an amendment offered by Sen. Johanns (R-Neb.) that repeals the 1099 provision and also reduces the number of people who will be subject to the individual mandate to buy health insurance or face a financial penalty.
The adoption of the Johanns amendment might just send a positive signal to the U.S. Chamber of Commerce for the first time in almost two years.Sen. Bill Nelson (D-Fla.) has filed an alternative amendment to the Johanns amendment, which would exempt businesses with fewer than 25 employees. Businesses with more than 25 employees are required to file the 1099s, but the reporting threshold is raised from $600 to $5,000 and credit card purchases would be exempt.
Whether the 1099 provision gets completely repealed or replaced with the Nelson plan, the outcome will tell U.S. businesses whether or not Congress is willing to help them to help the economy get moving again.
In the meantime, the Farm Bureau, a member association that is made up of our great farming and ranching businesses, also echoed the chambers fears. Its chief economist, Bob Young, said that repeal of the estate tax is the No. 1 tax issue for the Farm Bureau. Stay tuned to see if Congress will do the right thing this fall when it comes to the business community in America.
Elizabeth B. Letchworth is a retired, four-times-elected United States Senate Secretary for the Majority and Minority. She is the founder of GradeGov.com.